Vancouver blocks AirBnB as Sydney unleashes it on renters

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Via Bloomberg:

Vancouver has tightened its restrictions on Airbnb, Expedia’s HomeAway unit and other short-term rental operators as Canada’s priciest housing market seeks to ease its near-zero supply of homes to let.

“Housing is first and foremost for homes, not to be operated as a business,” Mayor Gregor Robertson told reporters on Wednesday.

Under the new rules, residents will only be able to rent principal residences and will be required to obtain a business license and pay as much as a 3 per cent tax on stays. Rentals of secondary suites, laneway homes and investment properties will be prohibited. City officials said they would be ready to pursue legal action against violators, as well as a C$1000 fine.

Meanwhile, in the land of terminal youth, from The ABC:

Airbnb has rapidly taken off in Australia, with 115,000 listings for rooms or entire homes to be rented.

But new figures raise concerns that the site is swallowing up properties once available to locals to rent long-term, as landlords cash in on lucrative nightly rates for tourists.

The figures from the University of New South Wales show 60 per cent of Sydney’s 20,000 Airbnb listings are for entire homes.

The university’s Chris Pettit said the figures underlined concerns about cheap, affordable housing being available for locals…

“We’re having a housing affordability crisis in Australia, and Airbnb and these sort of shared economy technologies can have an adverse impact on our housing affordability, specifically with the rental market.”

The emergence of Airbnb might help to explain why rental vacancies in have tightened (Melbourne) or remained tight (Sydney):

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In spite of a strong lift in dwelling construction relative to population growth:

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Research confirms it:

The research published this month in the Journal of the American Planning Association (Issue 1, 2017), centred on Sydney – the country’s biggest city where Airbnb has grown rapidly since 2011, doubling year-on-year to around 15,648 Sydney properties listed in January 2016.

Given the high demand for permanent rentals and the hot housing market, researchers from the University’s Urban Housing Lab sought to understand what impact Airbnb might be having on the Australian housing market and affordability.

The research analysed five municipalities across Sydney that attract tourists and see a concentration of Airbnb listings in locations around Sydney’s harbour, beaches, attractions and commercial hubs. These were the City of Sydney, Waverley covering Bondi, Bronte and Tamarama beachside suburbs, Marrickville, Leichhardt and Parramatta council areas.

Leading the research was Professor Nicole Gurran of Urban and Regional Planning and Policy in the University’s School of Architecture, Design and Planning: “There is little research to show what impact Airbnb has had on Australian communities over the last five years.

“While it is recognised that not all forms of online homesharing have had a serious impact since 2011, it is clear that providers like Airbnb are not helping the affordability problem facing many Australians on low incomes.

Our research has provided an early indication of the impact and the findings do call for further analysis of the implications of online home-sharing for local communities and the housing market.

…Airbnb is likely to help some residents who are sharing their homes with tourists by renting beds or rooms, earning a rental income equivalent to 10-19 per cent of median rents and mortgages. With time, however, the risk is that the mortgage relief or subsidy of housing costs gained by property owners will drive up property values, making these suburbs unaffordable for the next generation of wishful home owners.

The number of Airbnb properties potentially removed from Sydney’s permanent rental market with an average vacancy rate of around three per cent amounts to approximately half of the available rental properties. At the time of the research, it was found that in the city of Sydney a total of 1,268 properties were available on Airbnb, which is equivalent to 144 per cent of the city’s vacant rentals.

But the gubmint is happy:

Homeowners and property investors in NSW will be allowed to rent out entire homes and private rooms to tourists via home sharing platform Airbnb, as global cities move to crackdown on Airbnb rentals of entire homes.

The NSW government gave a green light to many of the recommendations of a parliamentary inquiry but will do more consultation next month.

The government said it will permit homeowners to rent out private rooms and primary residences on a short-term basis.

It will also allow short-term rental of empty properties, such as investment properties, unless it exceeds certain “impact thresholds”.

There is no consistent definition of “impact thresholds” and the upper limit of “short-term rental accommodation” ranges from 45 days a year to no limit in NSW.

The NSW government’s position puts Sydney at odds with other global cities, which are increasingly cracking down on entire home rentals on Airbnb because it reduces availability of rental housing stocks.

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Just another day in the racket.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.